Feb 9, 1985


NEW YORK, FEBRUARY (IPS/CLAUDE ROBINSON) Ė U.S. President Ronald Reaganís call Wednesday for a new round of trade negotiations next year received a cool reception Thursday from UN diplomats and officials here.

Some of diplomats and UN officials were sceptical about its value to the Third World.

Egyptís Ambassador and chairman of the Third World "Group of 77", Ahmed Tawfik Khalil, told IPS the proposal could be positive "if it denoted a new attention by the U.S. President to trade an development" issues.

And Indiaís deputy chief delegate, Ambassador P. M. Malik, said a new round could be "redundant" unless there was also a commitment to implement several aspects of the two previous negotiations that have still not been implemented.

The proposal was also discussed briefly at a meeting of the G-77, but the meeting decided to defer detailed consideration until after Ambassadors had been able to consult their governments.

In his fourth "state of the union" message to a joint meeting of the U.S. House and Senate Wednesday night, Reagan asked the United Statesí trading partners, "developing and developed alike, to join U.S. in a new round of trade negotiations to expand trade and competition and strengthen the global economy".

Reagan said there was need for "a stronger and simpler approach to the process of making trade policy".

Reaganís call came amid growing concern about the rising tide of protectionism in the United States as several traditional industries such as steel and auto, face stiff competition from both Third World and developing countries.

Against the background, one official noted that Reaganís statement was as much "tactical domestically" as an appeal for new international arrangements.

Some observers also suggested that the United States is principally concerned with settling differences with the European Economic Community and Japan, and that the Third World could be "marginalised" in such a process, as one European diplomat put it.

One Third World concern is the so-called "safeguards code", which came out of the "Tokyo Round" of trade negotiations in the 1970ís which permitted certain exceptions to free access and which the United States has used to build protectionist barriers, a G-77 official said.

The Third World group has long been arguing for the lowering of these barriers.

Jean Ripert, the UN Director General for Development and International Economic Cooperation, said that trade protectionism was one of the "major dangers" that might impede a solution to the debt crisis.

"If countries cannot export, they cannot pay back the debt or avoid contracting new debts", he said in an interview.

Latin American countries owe about half of the estimated 800 billion dollars that the Third World has borrowed from U.S. and other western commercial banks, governments and international lenders.

Some of the biggest borrowers, like Brazil, have been hardest hit by U.S. trade barriers.

The Reagan proposal was seen here in the context of the 1982 U.S. proposal at a Ministerial meeting of the General Agreement on Tariffs and Trade which urged that "trade in services" be brought under the GATT umbrella.

The United States has a decided advantage in this area which includes advanced technology, communication, consultancy, transborder data flows, information, banking, and insurance.

Some European countries, like France, and the Third World were lukewarm then and have not publicly changed their positions.

Consequently, some observers wondered whether Wednesdayís announcement was a continuation of that effort.

Several diplomats interviewed said they expected the U.S. position to become clearer after the April meeting of the "Development Committee" of the World Bank and the International Monetary Fund and the summit of the leaders of the seven major western industrial countries in Bonn in May.

At both meetings, Washington is expected to push for inclusion of "services" under the GATT umbrella, perhaps in return for relaxation of protectionism and an easing of tight monetary policy as the United Statesí European partners have been demanding.